ONGC sitting on a pile of cash is a myth: Sudhir Vasudeva

How do you plan to take forward the Perspective Plan 2030, especially since the company is facing production challenge in domestic as well as overseas operations?

We have now done a very comprehensive exercise. We hired Mckinsey and it acted as a facilitator. We are contributing 73 per cent of the country's oil production and 50 per cent of the gas production. If we have to maintain this position, we will have to grow in excess of three per cent, while historically we have grown at two per cent.

Global players like Exxon (US) and Shell (The Netherlands) are growing at two-three per cent, while Petrobras (Brazil) is growing at seven per cent. In India, oil and gas demand is projected to grow at three per cent. If we have to meet this demand, we have set a growth rate of four per cent which we believe is achievable.

ONGC sitting on a pile of cash is a myth: Sudhir Vasudeva

Our production has to increase from 62 to 130 mt by 2030. This is not possible only through domestic exploration and production. The contribution of OVL has to be six times what it is today.

In addition, we cannot keep our eyes closed to the growing importance of alternative fuels. We desire that 30 per cent our top line should come from alternatives or non-E&P (exploration and production) business. With all these, doubling our production and trebling our revenues, our market cap should be four times from what it is now.

ONGC sitting on a pile of cash is a myth: Sudhir Vasudeva

OVL has lately seen its production dipping, so how do you think its contribution will grow?

We have problems in Sudan, Syria and Libya. In Libya, problem is less since it was only in the exploration phase and, therefore, there is no loss in production. In Sudan, there is loss of production which began in July last year after Sudan was split into North and South.

There is no production from South Sudan, but North is limping back to production since April.

We are trying to work out some alternatives in South by seeing if some pipeline can be laid. So, at least there is some production coming from Sudan. However, in Syria, where Shell is the operator, a force majeure has been declared due to EU (European Union) sanctions. It's difficult to say anything on Syria till EU sanctions remain.

ONGC sitting on a pile of cash is a myth: Sudhir Vasudeva

In Iran, OVL did not make further investment due to US sanctions? Has Iran set some deadline to go ahead with the development of Farzad?

It's not that investment in Iran did not take place due to sanctions. We had made discoveries in Farzad-B and development had to take place. One can understand their psyche and the kind of pressure they are in due to sanctions.

This is their one source of revenue and so the pressure comes. But if we exit who is going to come. We are trying our best to make progress. Discussions are still going on.

ONGC sitting on a pile of cash is a myth: Sudhir Vasudeva

Even in Russia, OVL is reported to be facing problems with Sistema on valuation for a proposed merger between JSC Bashneft and OAO RussNeft with Imperial Energy?

A kind of protracted discussion has been going on between us. Anyone can ascribe any value to Imperial. But if it's being valued at $ 500 million, we are not ready to go ahead. But this is all part of discussion.

We have to do valuation of their property and they have to do valuation of ours and only when we both agree on valuations that one can move forward.

ONGC sitting on a pile of cash is a myth: Sudhir Vasudeva

I am an eternal optimist. We should get proper price on crude oil at least to continue our expansion projects. Last year's gross billing was $117 plus a barrel while we got only $54.7 per barrel. Our FY12 cost of production was $45. This year will be $47 so we are left with $8 at $55 realisation.

With production being stagnant and higher production cost how can we continue? This year's outlay is Rs 33,000 crore (Rs 330 billion). We cannot generate this with the existing margins, implying we will have to dip into our surplus and reserves. Everybody is talking that ONGC is sitting on a big pile of cash which is a big myth.